Topic 16, Exercise 1Growth in the Futures MarketsThe futures industry has changed a great deal over the last 20 years. Much of the growth in futures volume is related to the development of additional products in the financial futures area. In 2001, some of the Over-the-Counter Markets experienced some difficulty with the collapse of Enron and concerns about counter party risk. An article entitled, “Off the Charts: Futures Volume Soars to Record Highs,”summarizes some key elements related to performance and volumes in these markets. After reading this article, answer the following questions:1. What are financial contracts and what percentage of trading volume do these instruments represent?Financial contracts are futures contracts based on interest rates or indexes. They have grown rapidly and now comprise 85% of total trading volume.2. Which interest rate contract, Eurodollar or Treasury, is growing most rapidly?

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